NETWORK EXTERNALITIES FOR ENTERPRISE RESOURCE PLANNING SOFTWARE - A Research Roadmap

Georg Peters, Florian Thoma, Richard Weber

Abstract

Presently the ERP software market is characterized by a fierce competition of some of the largest software producers of the world. While SAP tries to defend its position as the market leader, Oracle, founded as database vendor, has heavily invested into its ERP business by taking over large related software producers like Peoplesoft or Siebel. Microsoft also bought ERP vendors as a basis for its MBS (Microsoft Business Solution) division. IBM and Sage are further players in the multi-billion market of ERP software. Currently the market faces two big challenges. (1) The classic ERP market addressing large corporations has become mature and is characterized by growth through displacement today. However the ERP market for SME still promises big growth rates. (2) The classic monolithic ERP systems are presently replaced by new middleware based technologies that provide open platforms to easily integrate business applications of third party software producers. Network externalities will significantly influence which ERP vendor(s) will dominate the future market. Therefore we will qualitatively analyse the current strengths and weaknesses of the presently most promising ERP producer with respect to network externalities.

References

  1. Arthur, B. 1989. Competing Technologies, Increasing Returns and Lock-in by Historical Events. Economic Journal 99, 106-131.
  2. Auchard E., Carew. S. 2007. Google enters mobile phone market, shakes industry. Reuters 05.11.2007 (http://www.reuters.com/article/asiaTechnology/idUSI ndia-30345320071105, retrieved 11.11.2007).
  3. Banker, R., Klemperer, C. 1989. Scale Economies in New Software Development. IEEE Transactions on Software Engineering 15, 1199-1205.
  4. Brynjolfsson, E., Kemerer, C. 1996. Network Externalities in Microcomputer Software: An Econometric Analysis of the Spreadsheet Market. Management Science 42, 1627-1647.
  5. David, P. A. 1985. Clio and the economics of QWERTY. American Economic Review 75, 332-7.
  6. Economides, N. 1996. The Economics of Networks. International Journal for Industrial Organization 14, 673-699.
  7. Economides, N. 2003. Dictionary of Terms in Network Economics. School of Business; New York University (http://www.stern.nyu.edu/networks/dictionary.html, retrieved 06.11.2007).
  8. Farrell J., Saloner, G. 1985. Standardization, compatibility, and innovation. Rand Journal 16, 70- 83.
  9. Henderson, B. 1974. The Experience Curve-Reviewed v. Price Stability. Perspectives (Reprint) 149 (http://www.bcg.com/publications/files/experiencecur veV.pdf, retrieved 06.11.2007).
  10. Henning-Thurau, T. 2004. Warum Kunden anderen Kunden im Internet zuhören. Jahrbuch der Absatzund Verbrauchsforschung 50, 52-75.
  11. Ihlenfeld, J. 2005. Oracle kauft Siebel für 5,85 Milliarden US-Dollar. golem.de 12.09.2005 (http://www.golem.de/0509/40386.html, retrieved 12.11.2007).
  12. Kahn, M., Davies, M. 2007. Oracle says to buy rival Hyperion for $3.3 billion. Reuters 01.03.2007 (http://www.reuters.com/article/businessNews/idUSW NAS264020070301, retrieved 12.11.2000).
  13. Katz, M., Shapiro, C. 1985. Network Externalities, Competition, and Compatibility. American Economic Review 75, 424-440.
  14. La Monica, P. 2004. Finally, Oracle to buy PeopleSoft. CNNmoney.com 13.12.2004 (http://money.cnn.com/2004/12/13/technology/oracle_ peoplesoft/, retrieved 12.11.2007).
  15. Leibenstein, H. 1950. Bandwagon, Snob, and Veblen Effects in the Theory of Consumers' Demand. Quarterly Journal of Economics 64, 183-207.
  16. Leiby, P., Rubin, J., Lu, C. 1997. Topics on Modeling New Technology Introduction: Learning-by-Doing, Irreversible Investment, Risk Aversion, and Limited Foresight. TAFV Model Technical Memorandum (http://pzl1.ed.ornl.gov/Topics2.pdf, retrieved 06.11.2007).
  17. Liebowitz, S., Margolis, S. 1995a. Are Network Externalities a New Source of Market Failure?” Law and Economics 17, 1-22.
  18. Liebowitz, S., Margolis, S. 1995b. Path dependence, lockin and history," Journal of Law, Economics, and Organization 11, 205-226.
  19. Liebowitz, S., Margolis, S. 1998. Network Effects and Externalities. Newman, P. (ed): The New Palgrave Dictionary of Economics and the Law 2. Stockton Press, New York, 671-74.
  20. Prodhan, G. 2007a. SAP unveils Web software, new business model. Reuters 19.09.2007 (http://www.reuters.com/article/technologyNews/idUS N1926461820070919, retrieved 11.12.2007).
  21. Prodhan, G. 2007b. SAP to buy Business Objects for 4.8 bln euro. Reuters 08.10.2007 (http://www.reuters.com/article/technology-mediatelco-SP/idUSL0768722820071008, retrieved 12.11.2007).
  22. Rosenberg, N., 1982. Inside the Black Box: Technology and Economics. Cambridge University Press, Cambridge.
  23. Succi, G., Predonzani, P., Valerio, A., Vernazza, T. 1998. Network externalities in software systems. StandardView 6, 185 - 191.
  24. Teplitz, C. 1991. The Learning Curve Deskbook. Quorum Books, Westport.
  25. Wright, T. 1936. Factors Affecting the Cost of Airplanes. Journal of Aeronautical Science 4, 122-128.
  26. Wu, T. 2007. IBM to buy software maker Cognos for $5 bln. Reuters 12.10.2007 (http://www.reuters.com/article/technology-mediatelco-SP/idUSN1244717520071113, retrieved 12.11.2007).
Download


Paper Citation


in Harvard Style

Peters G., Thoma F. and Weber R. (2008). NETWORK EXTERNALITIES FOR ENTERPRISE RESOURCE PLANNING SOFTWARE - A Research Roadmap . In Proceedings of the Tenth International Conference on Enterprise Information Systems - Volume 1: ICEIS, ISBN 978-989-8111-36-4, pages 97-104. DOI: 10.5220/0001674900970104


in Bibtex Style

@conference{iceis08,
author={Georg Peters and Florian Thoma and Richard Weber},
title={NETWORK EXTERNALITIES FOR ENTERPRISE RESOURCE PLANNING SOFTWARE - A Research Roadmap},
booktitle={Proceedings of the Tenth International Conference on Enterprise Information Systems - Volume 1: ICEIS,},
year={2008},
pages={97-104},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0001674900970104},
isbn={978-989-8111-36-4},
}


in EndNote Style

TY - CONF
JO - Proceedings of the Tenth International Conference on Enterprise Information Systems - Volume 1: ICEIS,
TI - NETWORK EXTERNALITIES FOR ENTERPRISE RESOURCE PLANNING SOFTWARE - A Research Roadmap
SN - 978-989-8111-36-4
AU - Peters G.
AU - Thoma F.
AU - Weber R.
PY - 2008
SP - 97
EP - 104
DO - 10.5220/0001674900970104